Black gold: Kase Lawal's business prowess, along with a spike in oil prices, is fueling CAMAC International's rise to the nation's second-largest black business

Black Enterprise, June, 2006 by Alan Hughes, Tennille M. Robinson

KASE L. LAWAL APPROACHES THE PODIUM WITH HIS USUAL serenity. He looks at the crowd of more than 200 well-wishers who traveled from all over the country--and across the globe--to pay tribute to his company, on its 20th anniversary.

It's a lively affair. Houston's Kuumba House Dance Theatre entertains the crowd. Thunderous drums and syncopated chants fill the ballroom as the group performs a variety of South, West, and East African songs and dances in traditional festive garb. As the room grows silent, Lawal begins his tale of growing up in Nigeria, migrating to America to pursue an education, and eventually launching an oil drilling and exploration company.

Not to be mistaken for a reckless wildcatter, Lawal is analytical and explores all options before committing to a business strategy or resources. Even in conversation, he pauses guardedly before responding to questions. He carefully weighs each word, communicating with precision and economy when conveying his message.

Lawal continues with an anecdote about CAMAC's early days, when he flew around the world to secure financing and land the deals needed to grow his company. His oldest son, Kase Jr., was in nursery school at the time, and the class was asked to discuss what their parents did for a living. "Several students raised their hands and yelled 'fireman, policeman, teacher, nurse, lawyer, and real estate agent,'" recalls Lawal. Then the teacher asked the younger Lawal about his father's occupation. "It was then that Kase, who frequently saw me off at the airport for business trips and who also had the occasion to travel at an early age said, 'He works at the airport and passes out peanuts.'"

Jokes aside, this enterprising CEO has good reason to celebrate. He has taken CAMAC (No. 2 on the BE INDUSTRIAL/SERVICE 100 list with $1.5 billion in sales) from humble beginnings to an oil and gas exploration and production giant that trades crude oil and natural gas in Africa and Europe as well as wholesale electric power in the United States. CAMAC affiliates own or lease oil and gas reserves on and offshore in West Africa and Colombia. Deals are in place to enter oil-rich Venezuela.

With the price of oil reaching a record-high $75 a barrel, CAMAC is positioned to meet or exceed the 51% revenue growth it achieved for 2005. But that's not the only thing driving Lawall. Determined to economically empower African Americans, his company has entered the financial arena. Through the recent acquisition of a controlling stake in the only black-owned bank in Texas, Lawal plans to offer community members greater access to capital. He's also considering a private equity fund to invest in minority-owned businesses as he expands his oil drilling operations into new regions. Due to Lawal's visionary zeal and the expansion of his business and financial empire, BLACK ENTERPRISE has named CAMAC International our 2006 Company of the Year.

HOT TEXAS TEA

The off industry is in the midst of one of the largest booms ever. As the world grows more industrialized, the demand for--and price of--oil continues to climb. "The oil industry itself is in great shape," says Jim Ritterbusch, president of Ritterbusch & Associates, a provider of industry research. "You're looking at prices that are within reach of record-high levels right now. To the extent that those lofty share prices reflect the health of the oil industry, you just have to say that it's in really, really good shape, possibly better shape than it's ever been."

That's not to say that higher prices are equivalent to bigger profits. The industry is a cyclical one. The cost of finding oil rises and falls in tandem with that cycle. While the price of crude oil has risen about 30% over the last year, Lawal maintains that the cost of extracting the precious liquid has escalated more than 100%. For instance, he cites a lease CAMAC signed in December for a semisubmersible rig that can drill as deep as 12,000 feet to the seabed. The cost to CAMAC: $320,000 per day. "That rig came off of contract in October last year at $127,000 a day," he recounts. "Suppliers are in that cycle now where they can make all the money they can because they know if oil goes down to $15, they're going to market those same rigs for $70,000."

Oil drilling is a risky business; it costs a lot to drill an exploratory well. To defray those costs, Lawal partners with some of the off and gas goliaths. CAMAC obtains the drilling rights and, at the same time, gains access to the deep pockets of industry leaders, such as Conoco and Chevron. Under the terms of the agreements, the partners split the profits. "So we can go into a partnership where we own the actual field and we'll share in the profit, but they put up the up-front capital to actually go in and drill the exploratory well. In some cases, we hedge our risks by partnering and doing it that way," says Willard Jackson, one of the directors on CAMAC's board.

COMING TO AMERICA

One could say that Lawal is representative of the immigrant success story. Born in 1954 in Ibadan, Nigeria, the entrepreneur was raised in what he calls a large, traditional, devoutly Muslim family. His father was a politician and his mother was a textile trader. As a young man, Lawal had dreams of coming to the United States, though he had no idea he'd become an entrepreneur. "Coming to the United States has always been something that youth during our period grew up with, which is the influence of the Western education--the movies, the television," he recalls. Even in his late teens, Lawal exhibited the discipline needed to become a successful businessman. He read everything he could about the United States and how he could get accepted into an American college. "He obviously had to be a risk taker to be the first person in his family to pack up and leave Nigeria and come to the United States with not much more than the clothes on his bacK," says Texas State Sen. Rodney Ellis. "That was a big move, a bold move. He was willing to take the plunge."